"We are seeing a weaker development in our sales in Western Europe and Asia than we expected entering the quarter," said Tom Johnstone, SKF president and CEO. "In Europe, it is quite broad-based and even if some industries, such as aerospace and renewable energy, develop well for us, I think that the demand reflects what is happening in the financial markets and a general lack of confidence. In Asia, we saw some improvement in our sales as we went through the first quarter and into the second quarter. However, the demand in Asia, primarily China, needed to continue to improve and this has not happened yet."
SKF has also taken steps to reduce its cost base in Germany through the introduction of voluntary early retirement and redundancy schemes. Both of these schemes are under way and are expected to result in a reduction of around 400 people with annual savings of around SEK 170 million when fully implemented in 2016.